IEX Share Price: Three key near-term triggers and why Motilal Oswal sees near-term pressure

Brokerage firm Motilal Oswal has reiterated its 'Neutral' rating on Indian Energy Exchange (IEX) after the company reported its December quarter results. The brokerage has maintained a price target of ₹142 per share, implying a potential upside of about 12% from current levels.

IEX reported its Q3 standalone revenue of ₹140 crore and EBITDA of ₹120 crore, both largely in line with estimates.

Performance was driven by traded electricity volumes of 34.1 billion units, which also met expectations. Standalone profit after tax came in at ₹120 crore, around 5% above Motilal Oswal's estimate, primarily aided by higher other income.

During the quarter, electricity volumes grew 11.7% year-on-year, while renewable energy certificate volumes declined sharply by 30%.

Motilal Oswal flagged that earnings estimates have already been lowered following the Central Electricity Regulatory Commission's announcement on phased market coupling, beginning with the Day-Ahead Market, which accounts for about 38% of IEX's 9MFY26 volumes.

Factoring in a potential 30% volume decline and a 10% reduction in transaction fees in the DAM segment, the brokerage now builds in a modest volume CAGR of 7% excluding RECs over FY26-28.

However, it said that any further delay in the implementation of market coupling or lower-than-expected market share loss could pose upside risks to earnings.

The brokerage pointed to several positives from the quarter, including IEX maintaining a dominant market share of 83% in electricity volumes during 9MFY26, compared with 88% in FY23 and 84% in FY24-25.

Management has also guided for volume growth of 15-20% year-on-year.

Additionally, market coupling for the DAM segment, earlier targeted for January 2026, is yet to be implemented, suggesting the rollout could take longer due to pending draft regulations, stakeholder consultations, and industry feedback.

Key monitorables, according to Motilal Oswal, include operational challenges in implementing market coupling in the DAM, clarity on the roadmap for market coupling in the real-time market, and near-term pressure on the stock as competitive dynamics around market share and transaction fees intensify.

Despite its steady financials, market coupling remains a key overhang for IEX, with proceedings still underway at the Electricity Appellate Tribunal.

Shares of IEX continue to trade near their 52-week low and ended 0.69% lower at ₹126.70. The stock has declined 28% over the past 12 months.